📋 Tender Overview
The bill of the Ministry of Labor and Social Security on the subject was submitted to the Parliament.
Occupational insurance is the second pillar of the insurance system, which functions in addition to the mandatory public social insurance, providing employees and businesses with additional possibilities of pension protection with supplementary pension benefits. With the new draft law, its operating framework is completely modernized, protection is strengthenedone of the insured and expands the available options of the existing professional insurance framework, to make it simpler, more functional, more protective and more attractive for employees and businesses.
The Minister of Labor and Social Security, Niki Kerameos, stated: .
The draft law establishes a modern regulatory framework for professional insurance, significantly more attractive, simpler, more functional, operating under the supervision of the Bank of Greece withnew way, with equivalent obligations and incentives for all occupational insurance providers, Occupational Insurance Funds and Insurance Companies.
At the same time it introduces three important changes:
The first big change is the introduction of Open Occupational Insurance Funds and Open Group Occupational Retirement Insurance Products (OGIPs) to make it easier for smaller businesses and freelancers to access occupational insurance. This need is linked to the structure of the Greek economy, where a large part of the businesses are small businesses with a limited number of employees, for whom until now access to the supplementary insurance of the second pillar has been almost impossible.
The second major change concerns the creation of a modern and highly upgraded tax incentive framework that aligns with best international practices and makes professional insurance significantly more affordable.attractive to employees and businesses. Contributions to these pension schemes are 100% deductible, the contribution ceiling increases significantly with the new bill and now amounts to 35,000 euros per year for the self-employed and 35% of the annual income for employees. The taxation of benefits is decoupled from years of insurance and is now linked to retirement age. For retirement from the age of 62 to the age of 67, a 10% tax is provided for a lump sum benefitor even 5% for pension, while. To exit the scheme after age 67, the rates are reduced to 5% for a lump sum and 2.5% for a pension. At the same time, the tax penalty is abolished for those employees who decide to enter occupational insurance at an older age.
The third important central intervention for the protection of the insured concerns the complete portability of their rights, so that a change of job or professional status does not lead to a loss or weakening of the insuredrights. First of all, group portability is introduced, as the possibility of transferring entire pension plans from TEA to TEA, from TEA to OAPS, from OAPS to TEA and from OAPS to OAPS is established. In addition, mobility in the labor market is facilitated by introducing individual mobility. An employee who changes jobs will be able to more easily transfer their vested rights to a new occupational insurance provider. Portability combined with powerful supervisorsprotection mechanisms of the insured exercised by the Bank of Greece, so that the strengthening of flexibility is accompanied by a corresponding strengthening of the protection of the insured.
The new framework for Professional Insurance has benefits for the insured, businesses, but also for the countrys Economy:
For those insured, it enhances retirement income, facilitates access to supplementary pension protection, protects and enables policy portabilityrights, protects freelancers, provides more transparency and better information about the progress of their investment and enables additional benefits.
For businesses, it motivates the attraction and retention of employees, provides the possibility of employer provision through a collective agreement, strengthens employer branding and corporate social responsibility, enables the management of investment funds and capital-investment support and etc.makes the framework more functional for smaller businesses that have so far struggled to take advantage of professional insurance.
And all this with significant tax incentives and benefits for everyone, employees, businesses and freelancers.
For the economy, it accumulates investment funds, injects liquidity into the economy and prevents capital flight, enhances long-term household savings, creates new jobs in the financial sector andIt utilizes professional insurance as a tool for long-term savings, investment and strengthening of pension adequacy.
It is worth noting that Ms. Kerameos incorporated more than 90% of the proposals of the agencies that were submitted before and during the consultation process.
With its submission to the Parliament, the draft law now enters the process of parliamentary processing, with the debate in the relevant Social Affairs Committee starting on Thursday, July 30.
